The European Commission on Thursday warned that the United Kingdom’s withdrawal from the European Union may leave a budget shortfall of at least €10 billion (around Rs 7.37 lakh crore). “A big country, a net contributor is leaving. That must have consequences,” said Budget Commissioner Günther Oettinger while presented a paper on the bloc’s future.

Oettinger added that the EU must either spend less or find new ways to fill the gap, such as levying additional taxes on financial transactions or slashing payments to farmers, reported BBC.

The EU had a Budget of €157.9 billion (approximately Rs 116.34 lakh crore) in 2017.

Oettinger also argued in a separate blog that sponsoring new initiatives for defence and internal security could take the total deficit to €20 billion (approximately Rs 14.7 lakh crore) a year. “The total gap could, therefore, be up to twice as much,” he wrote.

However, UK’s withdrawal is likely to simplify the EU’s Budget structure, according to BBC. UK has been enjoying a €3-billion (around Rs 2.2 lakh crore) rebate on its contributions since former Prime Minister Margaret Thatcher’s tenure. The complicated calculation results in a portion of the country’s total contribution being returned to the EU every year.

Moreover, the bloc may do away with the rebate give to Germany, Austria, the Netherlands and Sweden, according to The Guardian. “With the departure of the United Kingdom, the rebate that was introduced as a concession to that country in the past will become obsolete,” read Oettinger’s paper.

Earlier, EU had criticised British Prime Minister Theresa May’s proposal on the rights of EU citizens living in the UK after Brexit. “The UK’s offer is below our expectations and risks worsening the situation of [EU] citizens,” European Council President Donald Tusk had said on June 23.

Tusk had further said that it was important to ensure that the rights of EU and UK citizens were not at risk after Brexit. May, too, had admitted that there were some differences over the proposals, though she called it a “fair and serious offer”.

The British prime minister had set the stage for Brexit by triggering Article 50 of the Treaty on European Union on March 29. Currently, the UK is on course to leave the EU by March 30, 2019.